2024-05-09 00:30

Most Read: British Pound Sentiment Analysis & Outlook: GBP/USD, EUR/GBP and GBP/JPY Wondering how retail positioning can shape gold prices? Our sentiment guide provides the answers you are looking for—don't miss out, get the guide now! GOLD PRICE TECHNICAL ANALYSIS Gold (XAU/USD) fell on Wednesday, marking the second consecutive session of losses and nearly erasing Monday's entire rally. Despite short-term ups and downs, the precious metal has been locked in a sideways movement for the past two weeks. This period of consolidation clearly highlights the current market indecision, with traders likely waiting for new catalysts before taking new directional bets. To break out of this holding pattern, gold will need to clear either the resistance at $2,355 or the support at $2,280. A move above resistance would likely shift focus towards $2,415, potentially rekindling interest in the all-time high. Alternatively, a breach of support could trigger a slump towards an important Fibonacci area at $2,260, with further downside risk towards $2,225 in the event of a breakdown. GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView USD/JPY TECHNICAL ANALYSIS USD/JPY gained ground on Wednesday, climbing above resistance at 154.65. Should bullish momentum persist in the days ahead, prices may be able to push towards 158.00. On continued strength, all eyes will be on the 160.00 handle. Traders should approach any movement towards these levels with caution, as Tokyo may intervene to bolster the yen, causing the pair to quickly reverse its direction. Alternatively, if upside pressure weakens and the exchange rate veers downwards unexpectedly, potential support zones include 154.65, followed by 153.15. Further losses below this juncture may reignite bearish sentiment, creating the right conditions for a descent towards trendline support and the 50-day simple moving average, positioned just above the psychological 152.00 mark. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView Want to know where the euro may be headed in the second quarter? Explore all the insights available in our quarterly outlook. Request your complimentary guide today! EUR/USD FORECAST - TECHNICAL ANALYSIS EUR/USD slipped modestly on Wednesday, threatening to take out a key support at 1.0750. Should prices breach this threshold decisively later this week, selling momentum could pick up traction, potentially leading to a pullback towards 1.0725 and even 1.0695. Subsequent weakness could prompt a retreat towards the May lows in the vicinity of 1.0650. In the scenario of a bullish turnaround, the first obstacle to monitor lies near 1.0790, succeeded by 1.0820 – a technical zone that aligns with a medium-term downtrend line originating from the December 2023 highs. Additional gains beyond this point could open the door to a rally towards 1.0865, the 50% Fibonacci of the 2023 leg lower. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView https://www.dailyfx.com/news/xau-usd-gold-price-usd-jpy-eur-usd-technical-analysis-and-trade-setups-20240509.html

2024-05-08 15:48

Pound Sterling (GBP/USD) Analysis Bank of England likely to bide their time given uncertain April inflation data BoE statement in focus: will the monetary policy committee tee up the June meeting? GBP/USD remains cautious ahead of the meeting and updated quarterly forecast Supplement your trading knowledge with an in-depth analysis of Sterling's outlook, offering insights from both fundamental and technical viewpoints. Claim your free Q2 trading guide now! Will the BoE Offer up a Dovish Hold Tomorrow? The Bank of England (BoE) rounds up its two day policy meeting tomorrow when it is due to release the official statement. Previously, Governor Andrew Bailey hinted that the UK can deviate from the Fed with respect to the path of monetary policy – something that many developed central bankers need to get comfortable with. Generally, central bank heads like to follow the Fed but unfortunately the prevailing growth in the US is not being enjoyed in other parts of the world, meaning the Fed do not appear to be in a position to start cutting rates just yet. However, the BoE forecast in February showed inflation dropping sharply towards the middle of the year, before rising above it for an extended time. Deputy Governor Dave Ramsden – known to be a ‘hawk’ - then communicated to the market that he foresees inflation dropping to 2% and having a notable chance of remaining at target for some time. He went on to describe the risks to the inflation outlook favouring the downside, sending GBP/USD lower along side gilt yields. Source: Macrobond, ING Tomorrow’s statement will depend to some degree on the updated quarterly projections. Should the projections align with Dave Ramsden’s dovish comments, inflation over the medium-term would ease towards or hit 2%, down from 2.3% over the two-year horizon. Such a scenario poses a downside risk to cable given the US dollar’s impressive start to the week as US-UK policy expectations continue to drift apart. The vote split is likely to remain 8-1 (hold, cut) but keep an eye on any change to the forward guidance in the statement referring to rates “remaining sufficiently restrictive” for an “extended period”. Should this wording be dropped, markets may view it as a prelude to June for possible rate cut. GBP/USD Eases Ahead of Bank of England Rate Announcement Cable had eased in the early stages of the London session but after the Europe-US crossover, has risen and is trading around flat for the day at the time of writing. 1.2500 is the imminent level of resistance/support. A close above is needed to keep a bullish move alive but ultimately, markets will react to the new, updated forecasts. The April inflation print has the potential to throw a curve ball, as this is the month when firms implement contractual or index-linked price rises. Therefore, the committee may choose to read from the same script in the event the April price data provides a bump in the road along the disinflation journey. More broadly the pair struggles for a clear direction and remains sensitive to incoming news and data (Ramsden’s comments). A greater indication of a June cut could see further pressure on the pair while a decision to tow the line in restrictive policy and kick the can further down the road may see the pair recover recent losses. Resistance appears at the 200 day simple moving average and the 1.2585 mark. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/sterling-trader-s-watch-gbp-usd-slides-as-boe-meeting-jitters-take-hold-20240508.html

2024-05-08 14:00

Euro (EUR/USD) Analysis EUR/USD ticks lower again. However, it’s holding above $1.07 Italian inflation, BoE decision in focus Supplement your trading knowledge with an in-depth analysis of the Euro's outlook, offering insights from both fundamental and technical viewpoints. Claim your free Q2 trading guide now! The Euro remained under pressure against the United States Dollar on Wednesday. The Eurozone’s recent economic data have been decidedly mixed, but the thesis that the European Central Bank will be cutting interest rates before the Federal Reserve seems to be holding up pretty well. ECB Chief Economist Philip Lane told a Spanish newspaper on Tuesday his confidence that inflation will head back to its 2% target in a ‘timely manner’ had increased. This was taken by the markets as keeping the clear possibility of a June rate reduction in play, whereas no action is expected from the Fed until September. Of course, both scenarios are hugely data-dependent. The latest Eurozone numbers suggest resilience in the service sector but a harder time for both manufacturing and retail. Factory gate prices continue to retreat. As these can lead consumer price action it’s perhaps unsurprising that the Euro should be struggling to gain. The ECB won’t set interest rates again until June 6, and the wait could seem like a long one for Euro watchers. The coming session doesn’t offer much in the way of scheduled, likely trading cues for EUR/USD, but Thursday’s might. It offers inflation data from Italy, the Eurozone’s third-largest economy and an interest rate decision from the Bank of England. This isn’t expected to produce any monetary action - markets think a September cut is probable on available clues. But the British central bank’s commentary could be a mover for EUR/GBP. EUR/USD Technical Analysis EUR/USD Daily Chart Compiled Using TradingView It’s unclear whether the Euro is topping out or merely consolidating after the gains made at the start of May. The latter might be marginally more likely on the current showing, with the broad uptrend channel from mid-April still very much in place. It’ lower bound is still quite far below the current market, coming in at 1.06903 on Wednesday, probably too far down for an immediate test. The Euro remains below both its 200- and 50-day moving averages, which are now extremely close to each other just above the market. It’s hard to believe that Euro bulls won’t try and top these, at least, in the near future. If they can manage that, the uptrend will remain very much in place. Above it, the downtrend line from late December’s peaks will offer a firm challenge. Still, the pair is also close to retracement support at 1.07206. A slide below that could threaten a revisit to May 1’s lows, perhaps at least. They come in at 1.06480. It’s also worth bearing in mind that, while the technical picture is arguably quite bullish, the fundamental backdrop is less so and it might be wise to treat gains with caution in a market where monetary realities tend to reassert themselves. Learn the ins and outs when it comes to the euro and find out how to trade the most liquid currency pair in the world: By David Cottle for DailyFX https://www.dailyfx.com/news/euro-hands-back-some-gains-as-june-ecb-rate-cut-remains-on-table-20240508.html

2024-05-08 12:00

Japanese Yen Prices, Charts, and Analysis Bank of Japan warns over Yen weakness. US dollar strength may force further intervention. The Bank of Japan will closely monitor the FX market as USD/JPY pops back above 155.00, despite two rounds of ‘official’ intervention. Recent commentary by BoJ chief Kazuo Ueda suggests that the central bank are ready to act again, especially if a weak Yen starts to raise prices of imported goods. Speaking in Parliament on Wednesday, BoJ chief Ueda said, ‘Foreign exchange rates make a significant impact on the economy and inflation…depending on these moves, a monetary policy response might be needed’. The Bank of Japan is thought to have intervened twice last week in the FX market, buying Yen and selling US dollars. Although no official data is currently available, it is thought that the central bank intervened to the overall tune of around Yen9 trillion or around $60 billion. Most Read: Markets Week Ahead – Markets Risk-On, BoE Decision, Gold, Nasdaq, Bitcoin The Japanese economic data and events calendar has a few releases worth watching over the coming days, including the BoJ Summary of Opinions, before the Q1 GDP figure hits the screens on May 16th. The latest move higher in USD/JPY is negating the recent efforts by the Japanese central bank to boost the value of the Yen. Japanese officials will soon need to decide if the 155 level is an appropriate rate for USD/JPY in the short term. This is unlikely, given the recent central bank commentary, and it is likely that the BoJ/MoF will shortly return to the market in a further effort to boost the Yen. Official commentary will no longer work and the central bank will now have to decide how aggressive they can afford to be, and if they can get co-ordinated help from other central banks, to get the Yen to a level they feel appropriate. Central banks have deep pockets but markets can be ruthless and they will test any hesitation or wavering by the BoJ. The next few weeks look set to be volatile. Learn How to Trade USD/JPY with our expert guide: USD/JPY Daily Price Chart Retail trader data show 32.23% of traders are net-long with the ratio of traders short to long at 2.10 to 1.The number of traders net-long is 3.94% lower than yesterday and 26.12% higher from last week, while the number of traders net-short is 4.69% higher than yesterday and 24.31% lower from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. What is your view on the Japanese Yen – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/usd-jpy-strength-highlights-japanese-yen-s-vulnerability-to-us-dollar-resurgence-20240508.html

2024-05-08 10:00

FTSE 100, DAX 40, S&P 500 Analysis and Charts FTSE 100 hits yet another record high The FTSE 100 has so far seen four straight days of gains with each making a new record high ahead of this morning’s, the fifth day in a row around the 8,350 mark. Further up beckons the 8,500 region. The tentative April-to-May uptrend line at 8,280 offers support. FTSEDaily Price Chart DAX 40 trades at a one-month high The DAX 40 has seen four straight days of gains take it to a one-month high around the 18,450 level with the April record high at 18,636 representing the next upside target. Potential slips should find good support between the 24 and 29 April highs at 18,240 and 18,238. DAXDaily Chart S&P 500 sees five straight days of gains The S&P 500’s 3.5% rally from its early May low amid five consecutive days of gains has taken it to the 5,200 mark around which it may short-term lose upside momentum. A slip towards the 5,132 to 5,123 55-day simple moving average (SMA) and the late April high might be on the cards for this week. Were the recent advance to continue, the April record high at 5,274 would be back in the frame. S&P 500 Daily Chart https://www.dailyfx.com/news/ftse-100-makes-yet-another-record-high-while-dax-and-s-p-500-rally-is-slowing-down-20240508.html

2024-05-08 08:12

Australian Dollar (AUD/USD) Analysis RBA keeps rates unchanged, surprising markets Inflation proves stubborn, with elevated levels expected until 2025 AUD/USD pulls back - AUD more broadly, may find support from interest rate differentials (longer-term) Potential stabilization and benefits for the Aussie dollar amid global risk appetite Get your hands on the Aussie dollar Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: RBA Sticks to Policy Stance Despite Concerning Inflation Forecast The Reserve Bank of Australia (RBA) decided to keep the interest rate at a 12-year high (4.35%) on Tuesday, deflating the hawkish buildup priced in by the market. Ahead of the meeting, markets had priced in a 43% chance of another rate hike in September, the figure currently sits around 5%. The major stumbling block for the RBA has been the recent resurgence behind inflation. Quarterly and yearly inflation measures proved to be hotter-than-expected for Q1, with the monthly indicator for March adding to the trend of data surprises. Inflation is proving difficult to get under control but Australia is having a particularly tough time. The RBA Governor, Michele Bullock, expressed that she doesn’t necessarily think the Board will need to hike again but isn’t ruling out anything. She went a bit further, communicating her frustration with the first quarters inflation data by stating the RBA hope the economy will not have to stomach even higher rates but if services inflation gets stuck, the committee will have to act. What shocked the markets even more was the fact the RBA remained committed to their current monetary policy stance despite a notably higher and stubborn inflation forecast. Updated RBA staff forecasts expect inflation of 3.8% in June until December, only dipping back within the 2-3 percent target by December 2025. Central to the forecast is the assumption that the interest rate will remain unchanged until mid-2025 – nine months longer than the February forecast suggested. Therefore, the immediate disappointment playing out via a softer Aussie dollar will eventually find support due to this floor being set below Aussie rates. Other major central bank are seriously considering, or are on the verge of, cutting interest rates – something that may help support AUD provided there is no material risk aversion (flight to safety) playing out in the global economy. Acquire an in-depth understanding of the role played by the Australian dollar in terms of global trade and its significance as a gauge of risk sentiment : AUD/USD Disappointment May Self-Correct The move lower in AUD/USD is understandable after the RBA failed to live up to hawkish expectations and that disappointment is playing out via a softer AUD. Recent US dollar strength has also helped extend the move but the updated RBA forecasts suggest there may be little room for dovishness for the rest of the year which could see the Aussie dollar stabilise. With inflation expected to rise and remain elevated into 2025, the RBA may be forced to keep the policy rate steady at a time when major central banks are seriously considering cutting their policy rates. An improving interest rate differential alongside the current, global risk appetite may prove beneficial for the Aussie dollar. The current pullback may extend to the 200-day simple moving average (SMA) – the next level of interest after breaking below 0.6580. Weaker US jobs data (NFP, average hourly earnings) has also calmed expectations around re-accelerating inflation in the US, which may start to take affect in a relatively quieter week. Another thing to note with the US dollar is the divergence between the recent USD uplift despite treasury yields heading lower. If the dollar follows yields lower, the AUD/USD pullback may lose steam. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow Market Implied Rate Hikes in Basis Points (Bps) Source: Refinitiv, prepared by Richard Snow https://www.dailyfx.com/news/aussie-dollar-reaction-rba-s-firm-stance-collides-with-troubling-inflation-expectations-20240508.html